Correlation Between Lier Chemical and Fujian Oriental
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By analyzing existing cross correlation between Lier Chemical Co and Fujian Oriental Silver, you can compare the effects of market volatilities on Lier Chemical and Fujian Oriental and check how they will diversify away market risk if combined in the same portfolio for a given time horizon. You can also utilize pair trading strategies of matching a long position in Lier Chemical with a short position of Fujian Oriental. Check out your portfolio center. Please also check ongoing floating volatility patterns of Lier Chemical and Fujian Oriental.
Diversification Opportunities for Lier Chemical and Fujian Oriental
0.82 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Lier and Fujian is 0.82. Overlapping area represents the amount of risk that can be diversified away by holding Lier Chemical Co and Fujian Oriental Silver in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Fujian Oriental Silver and Lier Chemical is a relative statistical measure of the degree to which these equity instruments tend to move together. The correlation coefficient measures the extent to which returns on Lier Chemical Co are associated (or correlated) with Fujian Oriental. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Fujian Oriental Silver has no effect on the direction of Lier Chemical i.e., Lier Chemical and Fujian Oriental go up and down completely randomly.
Pair Corralation between Lier Chemical and Fujian Oriental
Assuming the 90 days trading horizon Lier Chemical Co is expected to under-perform the Fujian Oriental. But the stock apears to be less risky and, when comparing its historical volatility, Lier Chemical Co is 1.95 times less risky than Fujian Oriental. The stock trades about -0.07 of its potential returns per unit of risk. The Fujian Oriental Silver is currently generating about -0.01 of returns per unit of risk over similar time horizon. If you would invest 1,253 in Fujian Oriental Silver on September 14, 2024 and sell it today you would lose (461.00) from holding Fujian Oriental Silver or give up 36.79% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Lier Chemical Co vs. Fujian Oriental Silver
Performance |
| Timeline |
| Lier Chemical |
| Fujian Oriental Silver |
Lier Chemical and Fujian Oriental Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Lier Chemical and Fujian Oriental
The main advantage of trading using opposite Lier Chemical and Fujian Oriental positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Lier Chemical position performs unexpectedly, Fujian Oriental can make up some of the losses. Pair trading also minimizes risk from directional movements in the market. For example, if an entire industry or sector drops because of unexpected headlines, the short position in Fujian Oriental will offset losses from the drop in Fujian Oriental's long position.| Lier Chemical vs. Zijin Mining Group | Lier Chemical vs. Wanhua Chemical Group | Lier Chemical vs. Baoshan Iron Steel | Lier Chemical vs. Shandong Gold Mining |
| Fujian Oriental vs. Sanbo Hospital Management | Fujian Oriental vs. Lier Chemical Co | Fujian Oriental vs. Shenzhen Noposion Agrochemicals | Fujian Oriental vs. Meinian Onehealth Healthcare |
Check out your portfolio center.Note that this page's information should be used as a complementary analysis to find the right mix of equity instruments to add to your existing portfolios or create a brand new portfolio. You can also try the Equity Forecasting module to use basic forecasting models to generate price predictions and determine price momentum.
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